Mortgage Brokerage in Australia
Mortgage Brokers have been active in Australia since the early 1980s however they have only become a dominant force in the mortgage industry during the late 1990s on the back of aggressive marketing by Aussie Home Loans & Wizard Home Loans. Approximately 35% of all loans secured by a mortgage in Australia are introduced by mortgage brokers.
Mortgage Brokers are now regulated by the Australian Securities and Investments Commission. The new national consumer credit protection legislation includes a licensing regime and responsible lending obligations. Mortgage Brokers are also required to be a member of an external dispute resolution provider such as the Credit ombudsman service Limited (COSL). Further, some lenders require accredited brokers to be a member of an industry body such as the Mortgage & Finance Association of Australia (MFAA).
Australian mortgage brokers do not usually charge a fee for their services as they are paid by the lenders for introducing loans. They are paid an up front commission that is on average 0.66% of the loan amount and an ongoing trail commission that is on average 0.18% of the loan amount per annum paid monthly. These commissions can vary significantly between different lenders and loan products, especially since the commission re-alignments introduced by Australian banks during June to August 2008 in reaction to the Subprime mortgage crisis.
Although mortgage brokers are paid commissions by the lenders this does not alter the final rate or fees paid by the customer as it may in other countries. Mortgage brokers do not have the ability to charge the customer a higher or lower rate and in return obtain a higher or lower commission.
Read more about this topic: Mortgage Broker
Famous quotes containing the words mortgage and/or australia:
“We are playing with fire when we skip the years of three, four, and five to hurry children into being age six.... Every child has a right to his fifth year of life, his fourth year, his third year. He has a right to live each year with joy and self-fulfillment. No one should ever claim the power to make a child mortgage his today for the sake of tomorrow.”
—James L. Hymes, Jr. (20th century)
“It is very considerably smaller than Australia and British Somaliland put together. As things stand at present there is nothing much the Texans can do about this, and ... they are inclined to shy away from the subject in ordinary conversation, muttering defensively about the size of oranges.”
—Alex Atkinson, British humor writer. repr. In Present Laughter, ed. Alan Coren (1982)